With the New Year , the continuing COVID19 pandemic , and now political changes in Washington , it ’ s more important than ever that real estate investors be aware of how all these changes will impact their taxes .
Realty411 interviewed two tax experts to get the scoop on the best ways for investors to prepare for tax time .
Tony Watson Enrolled Agent , Senior Tax Consultant , and Public Speaker Robert Hall & Associates , Los Angeles
https :// www . roberthalltaxes . com / Phone : 8182932139
SM : Are there any new tax laws that investors need to be aware of ?
TW : Lots of new things ! Number one would have to be accelerated depreciation . Under the CARES Act , you can drop QIP ( Qualified Improvement Property ) depreciation improvements from 39 years to 15 years , which essentially gives you double the write off .
SM : What is the best thing investors can do to plan for tax payments , so they ' re not caught by surprise ?
TW : Meet with their tax preparers in the fourth quarter with yeartodate figures . This way , we can calculate the year ’ s liability well before the year is even over .
SM : What are some of the common mistakes you see investors make when it comes to tax planning and preparation ?
TW : Not knowing what is deductible or where to maximize the tax benefits .
SM : What documentation is essential for investors to have at tax time ?
TW : Gross rents received , mortgage interest forms , property tax paid amounts , and a breakdown of all improvements made to properties throughout the year .
SM : Do you have any additional comments or thoughts to share with Realty411 readers ?
Photo by Nataliya Vaitkevich from Pexels
TW : It is the right of EVERY taxpayer to plan ahead to pay less tax . If a taxpayer fails to plan , they are ultimately planning to fail .
50